Can You Afford to Offer a Holiday Bonus This Year?

Everyone loves a holiday bonus - particularly those on the receiving end. If you own a small business, how do you know if you can afford to give them out? And if you can't, what can you offer instead?

American Express conducted a survey and found that 35% of small businesses gave year-end holiday bonuses to their employees in 2012.

Since bonuses have been increasing over the past few years, it's likely that percentage will be even higher in 2013.

What are Your Options?

At the end of each year, small businesses start crunching numbers and hope they are profitable. And it's even better if they've done exceptionally well throughout the year.

If you've made a profit, you can determine if you want to give out a holiday bonus. Obviously, only you can decide this, but there are a few questions you can ask yourself to help you decide.

Have your employees gone above and beyond to help your company succeed? Have your employees consistently worked overtime hours, with or without pay? Would you be where you are now if it weren't for your employees? Do your employees deserve a holiday bonus?

If you answered 'yes' to any of these questions, you should highly consider giving out a holiday bonus.

What if you can't give out a large bonus?

So you've crunched the numbers and found that even though your business was profitable, you just can't afford to give each employee a large holiday bonus.

Instead of skipping the bonus altogether or writing a check for an insulting amount, how about giving each employee a gift card to a restaurant or local coffee house. This shows that you care without breaking the bank.

Other ideas for those companies that can't afford a large bonus include throwing a festive holiday party, buying the office lunch or giving each employee a bottle of wine.

Tip: It's always best to include all employees in terms of holiday bonuses. This creates the feeling of being a part of a team and reassures employees they're role is valuable.

What if you can't afford a bonus at all?

You've crunched the numbers and the bad news is you just have nothing left over to give to your employees. Though this may make you feel bad, unfortunately there is nothing you can do about it.

You can, however, offer your employees non-monetary bonuses. This shows you value and appreciate your staff and are willing to go the extra mile to make it known, even if funds may be short.

Ideas include giving extra paid time off (especially around the holidays), allowing employees to dress casually for the month of December, hosting a casual work barbecue one weekday afternoon or holding a contest where the winner receives a small monetary reward or gift card.

If the idea of holiday bonuses stresses you out, you can also choose not to give one at all and set those expectations from the get-go.

Instead, consider offering monthly bonuses to the most profitable employees or hosting a few fun events throughout the year.

Whether you decide to give a holiday bonus or not, it's important to show your employees you care.